Western Union has agreed to pay $586m and admitted to criminal violations including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.
The settlement covers investigations by the US Justice Department and Federal Trade Commission.
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According to admissions contained in the deferred prosecution agreement (DPA), the company admitted that between 2004 and 2012, it violated U.S. laws—the Bank Secrecy Act (BSA) and anti-fraud statutes—by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.
The agencies in their probe found that fraudsters contacted victims in the US and falsely posed as family members in need or promised prizes or job opportunities.
“Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds,” they said in a statement.
In the settlement, the company also agreed to implement anti-fraud program and enhanced compliance obligations.
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By GlobalData"As this case shows, wiring money can be the fastest way to send it — directly into the pockets of criminals and scam artists,” said acting assistant Attorney General David Bitkower. "Western Union is now paying the price for placing profits ahead of its own customers."
Western Union said it anticipates taking a charge of approximately $570m in its 2016 fourth quarter, to record the costs associated with the settlements, fees for the required independent compliance auditor, and related matters.
